Complaint Seeks Reduction
in the Price ComEd and Ameren Pay for Electricity

Chicago - Attorney General Lisa Madigan filed a complaint today with
the Federal Energy Regulatory Commission (FERC), alleging that electricity
suppliers engaged in price manipulation in an auction that Commonwealth
Edison Company and the Ameren Companies held in September 2006. Affidavits
filed with the complaint show that the prices produced by the auction
were 40 percent higher than prices in wholesale electricity markets and
approximately double the actual cost of generating electricity to serve
ComEd and Ameren customers. The complaint seeks modification of
ComEd’s and Ameren’s contracts with the energy suppliers
to reduce prices to a more reasonable level.

“Five million Illinois residents are unnecessarily paying electricity
prices that are double the actual cost of generating electricity and
40 percent higher than electricity prices in the wholesale electricity
markets,” said Madigan. “We undertook an extensive
investigation to find out why the prices produced by the auction were
so high. This complaint follows that lengthy investigation of bidding
patterns in the auction.”

In conducting the investigation, Madigan’s office worked with a
team of experts, including Robert McCullough, an expert on electricity
trading practices and finance. McCullough’s January 2002
testimony before the U.S. Senate Energy and Natural Resources Committee
is credited with initiating FERC’s investigation into Enron’s
activities in western electricity markets during 2000-2001. The
team of experts also included Richard Cirillo, Director of the Decision
and Information Sciences Division of Argonne National Laboratory; Jonathan
Koomey, a consulting professor at Stanford University and a Staff Scientist
at Lawrence Berkeley National Laboratory; Kris Childress, Technical Director
of GEV Corp.; and Scott Rubin, and independent consultant on electric
rate issues.

“Our investigation turned up disturbing evidence of price manipulation,” said
Madigan. “We are now calling on FERC to immediately open
a formal proceeding to gather additional evidence.”

The complaint relies in part on the results of a major study by Argonne
National Lab and the University of Illinois, which shows that the marginal
cost of generating electricity to serve ComEd and Ameren customers is
less than $30/MWH over 90 percent of the year and less than $36/MWH over
95 percent of the year. ComEd and Ameren customers are paying an
average of over $70/MWH for electricity purchased through the auction.

“Ameren and ComEd customers should not have to pay twice the cost
of generating the electricity needed to serve them,” said Madigan. “The
prices in the auction have resulted in rates that are grossly unfair
to consumers and which generate windfall profits for electricity suppliers – including
the generating affiliates of ComEd and Ameren.”

The analysis prepared by Robert McCullough concludes that the high prices
produced by the auction are largely due to a lack of competition in Illinois
electricity markets -- which U.S. Department of Justice guidelines classify
as “highly concentrated.” He also uncovered evidence
that electricity suppliers engaged in market manipulation – driving
prices even higher.

Confidential information is redacted from the public version of the complaint
and associated exhibits. The confidential information was obtained
from the Illinois Commerce Commission by the Office of the Attorney General
under provisions in the Attorney General Act.